The Diplomatic Correspondence of the American Revolution Volume XII Part 6

It is not necessary to mention what is in everybody's mouth, that the precious metals were first used as bullion, and that the inconvenience of weighing, and the difficulty of a.s.saying introduced the practice of coining, in order that the weight and fineness, might be known at the first view, and of consequence, the value be instantly ascertained. It is equally unnecessary to observe, that the great privilege of declaring this value by particular marks has, among all nations, been vested exclusively in the Sovereign. A trust so important could not indeed be vested anywhere else; because the danger of abusing it was too great. And history informs us, that Sovereigns themselves have not on this occasion behaved with that integrity, which was alike due to their subjects and to themselves, to the interests of their people and their own personal glory.

Experience has already told us, that the advantage of gold as a coin is in this country very considerably diminished, for every distinct piece must be weighed before it can be safely received. Both gold and silver coins are indeed preferable in one respect to common bullion, that the standard is presumed to be just, and consequently, they are received without the delays and expenses of a.s.saying. It must, however, be remembered, that they are all foreign coins, and of course, we are not only exposed to the tricks of individuals, but should it suit the interest or convenience of any Sovereign to make base money for us, there is nothing to prevent it. If, for instance, the King of England, or any of his Birmingham artists, should coin guineas worth but sixteen s.h.i.+llings sterling, our citizens would readily and freely receive them at twentyone s.h.i.+llings sterling. It is my duty to mention to Congress information I have received, that guineas of base metal are coined at Birmingham so well as to escape any common attention. Now there can be no doubt, that every such guinea received here would be a national loss to us of an English crown. How much we suffer in this way at present it is impossible, to estimate.

What I have already had the honor to observe contains some of the reasons why it appears to me highly necessary, that an American coin should be adopted without delay, and to these reasons it may be added, that there is a want of small money for the common occasions of trade, or that it is more felt by our soldiery than any other persons.

For the little pay, which they do receive, being either in gold or at best in dollars, the sutlers and others with whom they have dealings, continually take the advantage of their want of change, and rate the prices of their goods accordingly.

Shortly after my appointment, finding that there was a considerable quant.i.ty of public copper at Boston, I ordered it round to this place.

It has safely arrived, and will when coined amount to a considerable sum. The necessary machinery of a mint can be easily made, and there are persons who can perform the whole business. I must pray leave, therefore, to submit to Congress some few more particular remarks on this subject, as introductory to a plan for an American coin.

Although most nations have coined copper, yet that metal is so impure, that it has never been considered as const.i.tuting the money standard.

This is affixed to the two precious metals, because they alone will admit of having their intrinsic value precisely ascertained. But nations differ very much in the relation they have established between gold and silver. In some European countries an ounce of pure gold pa.s.ses for fifteen ounces of pure silver. In others for fourteen. In China it pa.s.ses for much less. The standard, therefore, which is affixed to both metals is in reality affixed to neither. In England, gold is to silver nearly in that proportion of one to fifteen, and in France nearly of one to fourteen. If a man carries fourteen ounces of gold from France to England he receives two hundred and ten ounces of silver, which in France purchases fifteen ounces of gold. In like manner he who carries from England fourteen ounces of silver to France receives one ounce of gold, which in England purchases fifteen ounces of silver. If it be, then, supposed that the coins of these two countries were alike pure, it must follow that in a short time all the gold coin of full weight would be in England, and all the silver coin of full weight in France. But the light silver circulating in England, and the light gold in France, the real standard of coin in each would be different from the legal, and seek a medium of fourteen and a half of silver for one of gold, although the legal standard might still be in the one place fifteen and in the other fourteen.

The demand which commerce might make for any of the precious metals, in preference of the other, would vary this real standard from time to time, and in every payment a man would get more or less of real value for his debt, according as he was paid in the coin of greater or less value, in relation to the real standard. If, for instance, the debt were contracted when the silver was to gold as one to fifteen, and paid when as one to fourteen; if the debt were paid in silver he would gain one thirtieth, and if in gold he would lose one thirtieth. In England the money standard is rather affixed to gold than to silver, because all payments are made in the former; and in France it is rather affixed to silver than to gold.

Arguments are unnecessary to show, that the scale by which everything is to be measured ought to be as fixed as the nature of things will admit of. Since, therefore, a money standard affixed to both the precious metals will not give this certain scale, it is better to make use of one only. Gold is more valuable than silver, and so far must have the preference. But it is from that very circ.u.mstance the more exposed to fraudulent practices. Its value rendering it more portable is an advantage, but it is an advantage, which paper possesses in a much greater degree, and of consequence the commercial nation of England has had recourse to paper for the purposes of its trade, although the ma.s.s of circulating coin is gold. It will always be in our power to carry a paper circulation to every proper extent. There can be no doubt, therefore, that our money standard ought to be affixed to silver.

But silver is liable, like everything else, to a change of value. If there is a demand for it to export, the value will rise; if the contrary it will fall; and so far it cannot be considered as a fixed measure of value. Before this objection be considered it will be proper to make a few reflections on another part of the present subject; but in this place I remark, that if the objection cannot be removed, we must not suffer it to be preponderate, because it weighs alike against every other metal.

To coin money is a certain expense, and of course it is an expense, which must be borne by the people. In England the coin when melted will sell as bullion for just as much as its weight in other coin. The expense of coinage is paid by the Crown, and of course is raised by taxes from the people. In France the coinage instead of being expensive yields a profit. The price given for metal at the mint is about eight per cent less than the same quant.i.ty will yield when coined at the French standard. Both of these methods are liable to objections. When commerce demands an exportation of bullion from England, the coin of the kingdom goes out in common with others. This increases, of course, the national expense of coinage. Laws to prevent the exportation, or importation of any thing so valuable as money are always nugatory, because they always _can_ be eluded, and therefore when private interest requires it they always _will_ be eluded. That the guineas of England, therefore, are not continually going away is to be attributed to the extraordinary value affixed to gold, which has just been mentioned, and which banishes silver continually. In France the people are not liable to this inconvenience, because their money pa.s.sing for more than its value in bullion, bullion will always be exported in preference to coin. But, for the same reason, there is always a strong temptation to imitate their coin and send it for the purchase of their commodities. It would be both impossible and unnecessary to distinguish the true from the false, because both would be of equal intrinsic value. The place at which they were struck would be indifferent to the receiver. Of consequence, the foreigner who made French coin, would gain; by his trade, and the French nation would lose proportionably.

The money paid for coining, or the coinage of France has, however, this advantage, that the money is a standard, which does not fluctuate with the price of bullion. This coinage is, as has been said, about eight per cent. When bullion is below ninetytwo, it is carried to the mint; when above ninetytwo, to the broker, or the silversmith. The coin still continues fixed, nor will it bear exportation until bullion rises to a hundred, when the French coin would be as liable to exportation as the English. In that case, it would be exported on one hand, while on the other no more would have been coined for a considerable period, because to make the eight percent coinage, it would be necessary that the mint price should be ninetytwo. The coin, therefore, could not long be exported, if at all, but would resume its value. The price of bullion must float between ninetytwo and a hundred, while the coin would preserve its fixed quality as money.

Hence then, it appears proper, that the price of coining should be defrayed by the coinage; because, first, it is natural and proper, that the price should be paid when the benefit is received, and that the citizen in return for the advantage of being ascertained in the value of the medium of commerce by the sovereign, should pay for ascertaining it, just as much as that he should pay for the fas.h.i.+on of the plate he uses, or the construction of the cart he employs.

Secondly, it is right that money should acquire a value as money, distinct from that which it possesses as a commodity, in order that it should be a fixed rule, whereby to measure the value of all other things. And thirdly, it is wise to prevent the exportation of coin, which would involve an unnecessary national expense, and also to prevent the imitation of it abroad, so as to create a national loss.

For both of which purposes, it is proper that the coinage should only defray the expense, without making any considerable profit. The laws usual in all countries, with respect to the money, will then fully operate the effect intended.

In order that a coin may be perfectly intelligible to the whole people, it must have some affinity to the former currency. This, therefore, will be requisite in the present case. The purposes of commerce require, that the lowest divisible point of money, or what is more properly called the _money unit_, should be very small, because by that means, price can be brought in the smallest things to bear a proportion to the value. And although it is not absolutely necessary, yet it is very desirable, that money should be increased in decimal ratio, because by that means all calculations of interest, exchange, insurance, and the like, are rendered much more simple and accurate, and of course, more within the power of the great ma.s.s of the people.

Wherever such things require much labor, time, and reflection, the greater number who do not know, are made the dupes of the smaller number who do.

The various coins which have circulated in America, have undergone different changes in their value, so that there is hardly any which can be considered as a general standard, unless it be Spanish dollars.

These pa.s.s in Georgia at five s.h.i.+llings, in North Carolina and New York at eight s.h.i.+llings, in Virginia and the four Eastern States at six s.h.i.+llings, and in all the other States, excepting South Carolina, at seven s.h.i.+llings and sixpence, and in South Carolina at thirtytwo s.h.i.+llings and sixpence. The money unit of a new coin to agree, without a fraction, with all these different values of a dollar, excepting the last, will be the fourteen hundred and fortieth part of a dollar, equal to the sixteen hundredth part of a crown. Of these units, twentyfour will be a penny of Georgia, fifteen will be a penny of North Carolina or New York, twenty will be a penny of Virginia and the Four Eastern States, sixteen will be a penny of all the other States, excepting South Carolina, and fortyeight will be thirteen pence of South Carolina.

It has already been observed, that to have the money unit very small, is advantageous to commerce; but there is no necessity that this money unit be exactly represented in coin, it is sufficient that its value be precisely known. On the present occasion, two copper coins will be proper, the one of eight units, and the other of five. These may be called an Eight, and a Five. Two of the former will make a penny Proclamation, or Pennsylvania money, and three a penny Georgia money.

Of the latter, three will make a penny New York money, and four a penny lawful, or Virginia money. The money unit will be equal to a quarter of a grain of fine silver in coined money. Proceeding thence in a decimal ratio, one hundred would be the lowest silver coin, and might be called a _Cent_. It would contain twentyfive grains of fine silver, to which may be added two grains of copper, and the whole would weigh one pennyweight and three grains. Five of these would make a _Quint_, or five hundred units, weighing five pennyweight and fifteen grains; and ten would make a _Mark_, or one thousand units, weighing eleven pennyweight and six grains.

If the mint price of fine silver be established at twentytwo thousand two hundred and thirtyseven units per pound, this being coined would be four times five thousand seven hundred and sixty grains, or twentythree thousand and forty units. The difference is eight hundred and three units, and therefore the coinage is eight hundred and three, or twentythree thousand and forty, or somewhat more than three fortyeight one hundred per cent, which would be about the expense attending it. A dollar contains by the a.s.says, which I have been able to get, about three hundred and seventythree grains of fine silver, and that at the mint price would be fourteen hundred and forty units.

In like manner, if crowns contain from four hundred and fourteen to four hundred and fifteen grains of fine silver, they would, at the mint price, be worth sixteen hundred units.

When such a coin shall have been established, the value of all others would be easily ascertained, because nothing more would be necessary than to have them a.s.sayed at the mint. The advantage of possessing legal money, in preference of any other, would induce people to carry foreign coin to the mint, until a sufficiency were struck for the circulating medium. The remainder of the foreign silver, together with the gold, should be left entirely to the operations of commerce as bullion.

In the present moment, it is by no means of such consequence to establish the relative value of different coins, as to provide a standard of our own, by which in future to estimate them. If the value were now sought, they must all be estimated in dollars, because dollars are called for in the several requisitions of Congress.

Without noticing the preference thus given of one coin over another, it is sufficient to observe, that if a greater alloy should be introduced by the Spanish government into their dollars, our interior regulations as to money would be overturned; and certainly we have no security that this will not happen. There is not any great inconvenience in leaving matters on their present footing, until they can be remedied by the operations of a mint; for it is not to be supposed that all the money raised by taxes in a State is to be brought out of it. I expect that there will be very little occasion to transport money from place to place. It is much easier to negotiate than to carry it; and if any species of money is generally received within a State at the same rate in which it is paid in taxes, there will be no difficulty in expending it at its value. Whenever money shall be struck by authority of the United States, then indeed it will be proper to receive in taxes no other coin.

If Congress are of opinion with me, that it will be proper to coin money, I will immediately obey their orders and establish a mint. And I think I can say with safety, that no better moment could be chosen for the purpose than the present; neither will anything have a greater tendency to restore public credit; for although it is possible that the new money will at first be received with diffidence by some, yet when it has been fairly a.s.sayed, it will gain full confidence from all, and the advantage of holding the only money, which can pay debts or discharge taxes, will soon give it the preference over all, and indeed banish all other from circulation. Whereas fixing a relation of value now on whatever principles attempted, might give offence to the power whose coin should, in any instance, be reduced from its present numerary value among us.

These sentiments are submitted, with all possible deference, to the United States in Congress a.s.sembled, in expectation of their further instructions on the subject.

With great respect, I have the honor to be, &c.

ROBERT MORRIS.

GEORGE WAs.h.i.+NGTON TO ROBERT MORRIS.[3]

Philadelphia, January 25th, 1782.

Sir,

I have received your favor of the 23d respecting Captain Hutchins, and shall give you a more definitive answer after I have seen that gentleman.

[3] _January 26th._ In consequence of the information received from Mr Thomas Paine, of the intentions of some officers to promote a general application by way of memorial to General Was.h.i.+ngton, respecting their pay, I sent for him and had a long conversation on various matters of a public nature. He observed, that his services to the public had rather been neglected. I told him I could wish his pen to be wielded in aid of such measures, as I might be able to convince him were clearly calculated for the service of the United States; that I had no views or plans but what were meant for the public good, and that I should ask no man's a.s.sistance on any other ground; that it was true I had nothing in my power at present to offer, as a compensation for his services, but that something might turn up, and that I should have him in my mind.--_Diary._

The following record is also contained among Mr Morris's papers, in his own hand writing, dated February, 1782.

"Having lately had several meetings with Mr Thomas Paine, the writer of a pamphlet, styled _Common Sense_, and of many other well known political pieces, which, in the opinion of many respectable characters have been of service to the cause of America, I thought this gentleman might become far more serviceable to the United States by being engaged to write in the public newspapers in support of the measures of Congress and their Ministers. My a.s.sistant, Mr Gouverneur Morris, is clearly of the same opinion, and in all our conferences with him, we have pointedly declared, that we sought the aid of his pen only in support of upright measures and a faithful administration in the service of our country. We disclaim private or partial views, selfish schemes or plans of any and every kind. We wish to draw the resources and powers of the country into action. We wish to bring into the field an army equal to the object for which we are at war. We wish to feed, clothe, move, and pay that army as they ought to be done, but we wish also to effect these on such terms as may be least burdensome to the people, at the same time that the operations shall be every way effective.

"Having these for our objects we want the aid of an able pen to urge the Legislatures of the several States to grant sufficient taxes; to grant those taxes separate and distinct from those levied for State purposes; to put such taxes, or rather the money arising from them, in the power of Congress, from the moment of collection;

"To grant permanent revenues for discharging the interest on debts already contracted, or that may be contracted;

"To extend by a new confederation the powers of Congress, so that they may be competent to the government of the United States and the management of their affairs;

"To prepare the minds of the people for such restraints and such taxes and imposts, as are absolutely necessary for their own welfare;

"To comment from time to time on military transactions, so as to place in a proper point of view the bravery, good conduct, and soldiers.h.i.+p of our officers and troops, when they deserve applause, and to do the same on such conduct of such civil officers or citizens, as act conspicuously for the service of their country.

"Finding Mr Paine well disposed to the undertaking, and observing that General Was.h.i.+ngton had twice in my company expressed his wishes, that some provision could be made for that gentleman, I took an opportunity to explain my design to the General, who agreed entirely in the plan. I then communicated the same to Mr Robert R. Livingston, Secretary of Foreign Affairs, and proposed that he should join me in this business, by furnis.h.i.+ng from his department such intelligence, as might be necessary from time to time to answer such useful purposes for which Mr Paine is to write; and in order to reward this gentleman for his labors, and enable him to devote his time to the service of the United States, it was agreed to allow him eight hundred dollars a year, to be paid quarterly. But it was also agreed, that this allowance should not be known to any other persons than those already mentioned, lest the publications might lose their force if it were known that the author is paid for them by government."

By a letter, which General Lincoln addressed, to me before he went to the eastward, I find that you approve of my plan of sending officers to the four New England States particularly, with the returns of their deficiencies of troops, and with instructions to attend upon the Legislatures, and to endeavor to impress them with the expediency, and indeed necessity, of filling their battalions previous to the opening of the campaign. He informed me also, that you would be glad to give the same officers some instructions relative to the business of your department. If so, I could wish you would have your letters ready to go by the next post, by which time I expect to have the returns prepared. I have not yet fixed upon the gentlemen who will be proper, but you can leave blanks for the insertion of the names of those who may be chosen.

As we may reasonably expect to hear soon again from Sir Henry Clinton, on the subject of the meeting of commissioners, I think it would be well to be preparing the substance of the powers to be delegated to the gentlemen to whom the transaction of the proposed business will be committed. What I would wish you to prepare particularly, is so much as will relate to the liquidation of the former accounts of prisoners, and making provision for their maintenance in future.

I have the honor to be, &c.

GEORGE WAs.h.i.+NGTON.

TO THE PRESIDENT OF CONGRESS.

Office of Finance, February 11th, 1782.

Sir,

The situation of my department makes it necessary to lay some matters of importance before the United States in Congress, and I shall endeavor to do so with as much precision, as possible.